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Motivating Agents: How Much Does the Mission Matter?

Author

Listed:
  • Carpenter, Jeffrey P.

    () (Middlebury College)

  • Gong, Erick

    () (Middlebury College)

Abstract

Economic theory predicts that agents will work harder if they believe in the "mission" of the organization. Well-identified estimates of exactly how much harder they will work have been elusive, however, because agents select into jobs. We conduct a real effort experiment with participants who work directly for organizations with clear missions. Weeks before the experiment, we survey potential participants for their organizational preferences. At the experiment, we randomly assign workers to organizations, creating either mission matches or mismatches. We overlay performance incentives to test whether they can make up for the motivational deficit caused by a mismatch. Our estimates suggest that matched workers produce 72% more than mismatched workers and that performance pay can increase output by 35% compared to workers who only receive a base wage. Considering matches and mismatches separately, we find that performance pay has only a modest effect on matched workers (a 13% increase) while it has a large effect (a 86% increase) on mismatches, an effect that erodes much of the performance gap caused by the poor match. Our results have broad implications both for those organizations already with well-defined missions (i.e., compensation and screening policies) as well as for those organizations strategizing about strengthening or clarifying their missions.

Suggested Citation

  • Carpenter, Jeffrey P. & Gong, Erick, 2013. "Motivating Agents: How Much Does the Mission Matter?," IZA Discussion Papers 7602, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7602
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Robert Dur & Max van Lent, 2018. "Socially Useless Jobs," Tinbergen Institute Discussion Papers 18-034/VII, Tinbergen Institute.
    2. Kosfeld, Michael & Neckermann, Susanne & Yang, Xiaolan, 2014. "Knowing that you matter, matters! The interplay of meaning, monetary incentives, and worker recognition," ZEW Discussion Papers 14-097, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Michael Kosfeld & Susanne Neckermann & Xiaolan Yang, 2017. "The Effects Of Financial And Recognition Incentives Across Work Contexts: The Role Of Meaning," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 237-247, January.
    4. Carpenter, Jeffrey, 2016. "The labor supply of fixed-wage workers: Estimates from a real effort experiment," European Economic Review, Elsevier, vol. 89(C), pages 85-95.
    5. repec:eee:eecrev:v:98:y:2017:i:c:p:199-216 is not listed on IDEAS
    6. Lea Cassar, 2014. "Optimal contracting with endogenous project mission," ECON - Working Papers 150, Department of Economics - University of Zurich, revised Oct 2014.
    7. Dur, Robert & van Lent, Max, 2018. "Serving the public interest in several ways: Theory and empirics," Labour Economics, Elsevier, vol. 51(C), pages 13-24.
    8. Banuri, Sheheryar & Keefer, Philip, 2013. "Intrinsic motivation, effort and the call to public service," Policy Research Working Paper Series 6729, The World Bank.
    9. Sheheryar Banuri & Philip Keefer & Damien de Walque, 2017. "Love the job... or the patient? Task vs. mission-based motiviations in healthcare," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 17-09, School of Economics, University of East Anglia, Norwich, UK..
    10. Cardella, Eric & Depew, Briggs, 2016. "Testing for the Ratchet Effect: Evidence from a Real-Effort Work Task," IZA Discussion Papers 9981, Institute for the Study of Labor (IZA).
    11. Robin Zoutenbier, 2014. "The Impact of Matching Mission Preferences on Well-being at Work," Tinbergen Institute Discussion Papers 14-036/I, Tinbergen Institute.
    12. Banuri, Sheheryar & Keefer, Philip, 2016. "Pro-social motivation, effort and the call to public service," European Economic Review, Elsevier, vol. 83(C), pages 139-164.
    13. Robin Zoutenbier, 2016. "The impact of matching mission preferences on well-being at work," Economics of Governance, Springer, vol. 17(3), pages 295-315, August.
    14. Lea Cassar, 2014. "Job mission as a substitute for monetary incentives: experimental evidence," ECON - Working Papers 177, Department of Economics - University of Zurich.
    15. repec:eme:rexezz:s0193-230620160000019004 is not listed on IDEAS
    16. Sheheryar Banuri & Philip Keefer, 2016. "Mellowing with Tenure? Socialization Increases Prosocial Behavior in Public Organizations," Research in Experimental Economics,in: Experiments in Organizational Economics, volume 19, pages 127-140 Emerald Publishing Ltd.
    17. Max van Lent, 2017. "Increasing the Well-Being of Others On-the-Job and Outside the Workplace," Tinbergen Institute Discussion Papers 17-061/VII, Tinbergen Institute.
    18. repec:eee:gamebe:v:107:y:2018:i:c:p:182-202 is not listed on IDEAS
    19. Jeworrek, Sabrina & Mertins, Vanessa & Vlassopoulos, Michael, 2018. ""The good news about bad news": Feedback about past organisational failure and its impact on worker productivity," IWH Discussion Papers 1/2018, Halle Institute for Economic Research (IWH).

    More about this item

    Keywords

    principal-agent; mission; incentive; labor supply; experiment;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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